Eric King:  “Bill, what’s taking place here in the gold market that people should be aware of?”

Kaye:  “The footprints that we’ve discussed in the past are back.  GLD, which had been left alone until recently, has been looted in the last few trading days.  So the Spyder Gold Trust has lost 11 tons of gold in just three trading days....

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“In the past when we’ve seen these raids take place, Eric, it’s often been an early indication of what the cartel wants to do next, which is simply to take the paper price lower.  In order to do that they need the gold feedstock to deliver, and GLD has certainly been one of the more important sources of physical gold that has been necessary to satisfy the demand that exists in this area of the world (Asia).

The timing is interesting because we’re now through the traditionally strong period where people stock up prior to Chinese New Year.  So this is traditionally a soft period for demand because they have already stocked up on gold at this point in time.  Meaning, it’s a good window if the cartel wants to operate in it.

The sell side, Goldman Sachs, Societe Generale, etc., virtually all of these bullion banks were publishing very bearish reports on gold prior to the smash that began in April of last year, and they are back at it again, calling for $1,050, and some for even lower prices.  So when you add it all up, these things should cause people to be a little bit cautious in the near-term. 

Having said that, at these levels, or possibly on dips, this is an excellent opportunity for long-term investors to accumulate physical gold.  It’s just that on a short-term basis things are a bit more tricky with the footprints we are now starting to see.”

Eric King:  “The West is holding a losing hand here, Bill -- the West is declining and the East is rising.  What are your thoughts on the end game, and what the Western central planners are up to?”

Kaye:  “It’s a strategy that is mind-boggling.  It’s difficult to understand why the Western central planners would develop a strategy that would intentionally see the exodus of gold, in very large amounts, from the West to the East, but that’s what we are continuing to see.  We are seeing real wealth change hands at extremely attractive price levels. 

This gold is flowing from places like London and Switzerland.  I’m assuming there is very little or virtually no gold left at the New York Fed and Fort Knox.  But if there is, people can assume that gold is also traveling East as well.  So the question is, why would the West do this?  And the answer is, perhaps a deal was struck with China.

Meaning, China has been extremely vocal in recent years about their displeasure with Western monetary policy, particularly that of the US Fed.  It would not be unfathomable that in the background a deal was struck in which China agreed to keep the Ponzi scheme in the US going, in exchange for having the opportunity to buy gold at extremely attractive price levels.

That type of situation makes a lot of sense to me, at least from the Chinese perspective.  My contacts in China tell me this is plausible, but I think there are very few people in the world who know whether that is true or not.  Outside of that theory, it’s very hard to come up with answers that make a lot of sense when it comes to what the West is doing.

A depressed gold price, and this is certainly part of the Western central planners’ agenda, does signal something that is entirely false to the world at large -- that everything is OK and there is no problem at all with fiat currencies and the US dollar in particular.  So it does help to extend for a bit longer the reign of the US dollar as the world’s reserve currency, because very low gold prices suggest that the US dollar is strong, and therefore that US Fed policies are sound policies. 

I think people who have thought about that in any real depth understand that is utter nonsense, and eventually there will be hell to pay.  But in the near-term I think we will definitely see a real shakeup in the global financial architecture.  However, we are not quite there yet, and suppressing the gold price extends that final day of reckoning, Eric.”

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IMPORTANT - KWN will be releasing at least two more interviews today.

The audio interviews with Michael Pento, Art Cashin, Rick Rule, David Stockman, John Mauldin, Eric Sprott, Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, MEP Nigel Farage, James Dines and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

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